string.Template matches a $identifier with the regex [_a-z][_a-z0-9]* and re.IGNORECASE. This matches S, ſ and s, but not ß. https://github.com/python/cpython/blob/master/Lib/string.py#L78 (this code came up on python-dev)

The docs specify "any case-insensitive ASCII alphanumeric string (including underscores) that starts with an underscore or ASCII letter.". This includes S and s, but neither ſ nor ß. https://docs.python.org/3/library/string.html#template-strings

The docs refer to PEP 292, which specifies "By default, 'identifier' must spell a Python identifier [...]" This includes S, ſ, s and ß. https://www.python.org/dev/peps/pep-0292/

It's not entirely clear what the correct behaviour is (probably accepting any Python identifier). In any case, the current behaviour of string.Template is a bit silly, but changing it might break stuff.

There is no contradiction. PEP 292 means Python 2 identifiers. Python 3 documentation was changed according to changing the definition of Python identifiers (see issue24351).

Should the PEP be clarified?

PEPs aren't really intended to be ongoing specs, keeping up with implementation changes.  The documentation is pretty clear in defining identifiers as "any case-insensitive ASCII alphanumeric string (including underscores) that starts with an underscore or ASCII letter".